BUDGETARY POLICY A LINE-ITEM VETO FOR THE PRESIDENT: Prudent Way to Restrain Spending or Unwise Grant of Power?

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1 DEBATE 21 BUDGETARY POLICY A LINE-ITEM VETO FOR THE PRESIDENT: Prudent Way to Restrain Spending or Unwise Grant of Power? PRUDENT WAY TO RESTRAIN SPENDING ADVOCATE: Paul Ryan, U.S. Representative (R-WI) SOURCE: Testimony during hearings on The Constitution and the Line- Item Veto, U.S. House of Representatives, Committee on the Judiciary, Subcommittee on the Constitution, April 27, 2006 UNWISE GRANT OF POWER ADVOCATE: Cristina Martin Firvida, Senior Counsel, National Women s Law Center SOURCE: Testimony during hearings on The Constitution and the Line- Item Veto, U.S. House of Representatives, Judiciary Committee, Subcommittee on the Constitution, April 27, 2006 ake it or leave it is a familiar phrase most of us have used, and it is also implic- the reality of every bill passed by Congress and sent to the president. Once Titly a bill arrives in the Oval Office, the president has three options: (1) Sign it into law. (2) Veto the bill by returning it to Congress. In this case it requires a two-thirds vote in both houses to override the veto and to make the measure law. (3) Do nothing, figuratively putting the measure in his pocket, in which case there are two possible outcomes. If Congress has adjourned, then the bill dies after 10 days by what is called a pocket veto. If, however, Congress remains in session, then after 10 days the bill becomes law in what might be called a pocket passage. What presidents cannot do is line out specific provisions of a measure presented to them. They must accept or reject it as a whole. The president s ability to reject legislation gives him considerable influence in the legislative process. By threatening to veto an act, presidents gain leverage to have it shaped at least in part according to their wishes. But Congress also has its ways and means of avoiding vetoes. One is to build provisions that a president might dislike into important legislation that the president would be reluctant to veto. If, for instance, a member manages to get a provision to build a veterans hospital slipped into the Defense Department budget, the president can either accept a hospital he had not wanted or veto the entire defense appropriations act. Sometimes, especially in the Senate, such unwanted provisions are attached to bills that are not related. These are called riders and would apply to a veterans hospital inserted into a bill about food stamps. From the very beginnings of the Republic, presidents have been frustrated with their take-it-or-leave-it position. From the nature of the Constitution, George Washington grumbled, I must approve all the parts of a bill, or reject it in toto. And as far back as Ulysses S. Grant, presidents of both parties have sought the authority to line-item veto. In a literal sense the term line-item veto could apply to any provision of any legislation, but in practice it has come to apply mostly to spending and taxation measures. Advocates 2

2 of a line-item veto argue it is particularly important to combat pork-barrel provisions, or just pork, a designation that stems from the pre Civil War DEBATE 21 practice of providing barrels of salt pork to be divided among slaves. These are expenditures like the hypothetical veterans hospital above, which benefit the district of a member of Congress and which are added on to spending bills because of a member s power, to secure a member s vote, or to help a member get reelected. The pressure to give the president a line-item veto has increased in recent years, and is very much related to budget deficits that the federal government has had during all but three years since This line-item veto drive reached its high point when in 1996 the Republican-dominated Congress and Democratic President Bill Clinton found it was something they could agree on. From the Republicans perspective, the Line Item Veto Act seemed to be a way to restrain spending. From the president s point of view, it added to his powers. The act permitted the president to line out specific spending provisions and those taxing provisions that affected fewer than 100 taxpayers before signing the legislation. Any lined out provision had to be sent back to Congress, which could once again approve the item by a majority in each house. In this case, the re-approved provisions went back to the president, who could sign or reject them, subject to the normal override procedures. During the first two years after the Line Item Veto act became law, President Clinton lined out very few items, a record that can be reviewed in the section Where to Find More that follows. Then, however, the act was ruled unconstitutional by a 6 to 3 vote in the Supreme Court case of Clinton v. City of New York (1998). The court found that eliminating some items created a law different from the one passed by Congress. In the majority opinion, Justice John Paul Stevens wrote, If the Line Item Veto Act were valid, it would authorize the President to create a different law one whose text was not voted on by either House of Congress or presented to the President for signature. [Such a law] may or may not be desirable, but it is surely not [valid] pursuant to the procedures designed by the Framers of the Constitution. The Court s decision led to proposals in Congress to amend the Constitution to permit a line-item veto and others to try to craft a line-item veto that would pass the Court s scrutiny. It was during those hearings on such a proposal that the two advocates in this debate gave testimony. POINTS TO PONDER Notice that like many debates in this volume, the controversy over the line-item veto has ramifications beyond the immediate issue. In this case, giving the new authority to the president would enhance the power of the presidency relative to Congress. Consider whether it would be better for Congress to control its own pork-barrel spending rather than give a new grant of power to the president. Think about whether the budget does or should reflect the interests of the whole versus the disaggregated interests of the many. Since every budget inherently collects revenue and distributes benefits, what is the line between what is laudable and what is pork? 3

3 4 Debate 21 A Line-Item Veto for the President: Prudent Way to Restrain Spending PAUL RYAN [I am here] to testify on H.R. 4890, the Legislative Line-Item Veto Act of This legislation would help the President and Congress work together to reduce our budget deficit by providing the President with the authority to single out wasteful spending items and narrow special-interest tax breaks included in legislation that he signs into law and send these specific items back to Congress for a timely vote. Unlike the line-item veto authority provided to President [Bill] Clinton in 1996, H.R is constitutional because it requires an up-or-down vote in both chambers of Congress under an expedited process in order to effectuate the President s proposed rescissions. It is important that Congress act now to give the President this tool to bring greater transparency, accountability and a dose of common sense to the federal budget process. THE PROBLEM The amount of pork-barrel spending included in the federal budget continues to increase every year. According to Citizens Against Government Waste (CAGW), the federal government spent $29 billion on 9,963 pork-barrel projects in Fiscal Year 2006 (FY 2006), an increase of 6.3% from 2005, and an increase of over 900% since [Pork barrel spending refers to budget allocations favored by one or another member of Congress but are of questionable national concern.] Overall, the federal government has spent $241 billion on pork-barrel projects between 1991 and 2005, an amount greater than two-thirds of our entire deficit in FY This includes irresponsible spending on items such as the $50 million Rain Forest Museum in Iowa; $13.5 million to pay for a program that helped finance the World Toilet Summit; and $1 million for the Waterfree Urinal Conservation Initiative. Many of these pork-barrel spending projects are quietly inserted into the conference reports of appropriations bills where Congress is unable to eliminate them using the amendment process. In fact, the only time that Congress actually votes on these items is during an up-or-down vote on the entire conference report, which includes spending for many essential government programs in addition to the pork-barrel earmarks. In this situation, it is very difficult for any member to vote against an appropriations bill that, as an overall package, may be quite meritorious, despite the inclusion of wasteful spending items. Unfortunately, the current tools at the President s disposal do not enable him to easily combat these wasteful spending items either. Even if the President identifies numerous pork-barrel projects in an appropriations bill, he is unlikely to use his veto power because it must be applied to the bill as a whole and cannot be used to target individual items. This places the President in the same dilemma as members of Congress. Does he veto an entire spending bill because of a few items of pork when this action may jeopardize funding for our troops, for our homeland security or for the education of our children? The President s ability to propose the rescission of wasteful spending items

4 Budgetary Policy 5 under the Impoundment Control Act of 1974 has been equally ineffective at eliminating wasteful spending items. The problem with the current authority is that it does not include any mechanism to guarantee congressional consideration of a rescission request and many Presidential rescissions are ignored by the Congress. In fact, during the 1980 s, Congress routinely ignored President Reagan s rescission requests, failing to act on over $25 billion in requests that were made by the administration. The historic ineffectiveness of this tool has deterred Presidents from using it with any regularity. SUMMARY OF H.R. 4890, THE LEGISLATIVE LINE-ITEM VETO ACT OF 2006 I introduced H.R. 4890, the Legislative Line-Item Veto Act of 2006, on March 7, This legislation, which currently has the support of 101 bipartisan cosponsors in the House, is based on the administration s proposal to provide line-item veto authority to the President and is the product of discussions that I and my congressional colleagues have had with the White House since the President announced his intent to seek line-item veto authority in the State of the Union Address on January 31, The Legislative Line-Item Veto Act is very similar to an expedited rescissions amendment that I offered during the consideration of H.R on June 24, 2004, with my former colleague Representative Charlie Stenholm, a Democrat from Texas. Like H.R. 4890, this amendment would also have allowed the President to propose the elimination of wasteful spending items subject to congressional approval under an expedited process. Although this amendment failed to pass the House, it attracted the support of 174 members of Congress, including 45 Democrats. A similar provision is also included in Section 311 of the Family Budget Protection Act, legislation that I introduced along with Congressman Jeb Hensarling of Texas [R], Congressman Chris Chocola of Indiana [R], and former Congressman Christopher Cox of California [R] during 2004 and again in If passed, H.R would give the President the ability to put on hold wasteful discretionary spending, wasteful new mandatory spending, or new special-interest tax breaks (those that affect less than 100 beneficiaries) after signing a bill into law. The President could then ask Congress to rescind these specific items. The requirement that both the House and Senate approve all proposed rescissions means that Congress will continue to control the power of the purse and will have the final word when it comes to spending matters. However, unlike the current rescission authority vested in the President under the Impoundment Control Act of 1974, the bill also includes a mechanism that would virtually guarantee congressional action in an expedited time frame. Using the Legislative Line-Item Veto, the President and Congress will be able to work together to combat wasteful spending and add transparency and accountability to the budget process. This tool will shed light on the earmarking process and allow Congress to vote up or down on the merits of specific projects added to legislation or to conference reports. Not only will this allow the President and Congress to eliminate wasteful pork-barrel projects, but it will also act as a strong deterrent to the addition of questionable projects in the first place. On the other hand, members who make legitimate appropriations requests should have no problem defending them in front of their colleagues if they are targeted by the President. With H.R. 4890, we can help protect the American taxpayer from being forced to finance

5 6 Debate 21 wasteful pork-barrel spending and ensure that taxpayer dollars are only directed toward projects of the highest merit. The process under H.R would begin with the President identifying an item of wasteful spending or a specialinterest tax break in legislation that is being signed into law. The President would then submit a special message to Congress, asking for Congress to rescind this wasteful item or items. House and Senate leadership would have the opportunity to introduce the President s rescission requests within two days following receipt of the President s message. After that time period, any member of Congress would be able to introduce the President s rescission proposal, virtually guaranteeing congressional action. Once the bill is introduced, it would be referred to the appropriate committee, which would then have five days to report the bill without substantive revision. If the committee fails to act within that time period, the bill would be automatically discharged to the floor. The bill would have to be voted on by the full House and Senate within 10 legislative days of its introduction, with a simple majority required for passage. Since introducing H.R. 4890, I have received substantial feedback from interested Members of Congress on ways to improve the legislation to ensure that it best meets its intent of controlling federal spending while keeping the power of the purse squarely in the legislative branch. Among the changes that I think may improve the legislation are the following: limiting the time period available to the President to make a rescission request after signing a bill into law; limiting the number of rescission requests that can be made for each piece of legislation signed into law; allowing for the bundling of rescission requests; explicitly prohibiting duplicative requests; and tightening the language that allows the administration to defer spending while a rescission request is being considered by Congress. These changes will strengthen the bill and better ensure that the legislative branch retains all of the powers delegated to it by our founding fathers. I am committed to continuing to work with my colleagues in Congress and the administration throughout the legislative process to make sure that H.R is narrowly drafted in order to best achieve its goals. CONSTITUTIONAL ISSUES H.R passes constitutional muster because it requires both the House and Senate to pass rescission legislation and send it to the President for his signature before the rescissions become law. In Clinton v. City of New York [1998], the U.S. Supreme Court held that the lineitem veto authority provided to President Clinton in 1996 violated the Presentment Clause of the U.S. Constitution (Article I, Section 7, Clause 2), which requires that every bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States. The problem with this version of the lineitem veto was that the President s requested rescissions would become law by default if either the House or Senate failed to enact a motion of disapproval to stop them from taking effect. The lower court in Clinton v. City of New York also held that this version of the line-item veto upset the balance of power between the executive and legislative branches. Unlike the 1996 line-item veto legislation, H.R leaves Congress in the middle of the process where it belongs and follows the procedure and balance of power outlined in our Constitution. H.R also withstands constitutional scrutiny under the U.S. Supreme

6 Budgetary Policy 7 Court s holding in I.N.S. v. Chadha [1983]. In I.N.S. v. Chadha, the Supreme Court invalidated part of the Immigration and Nationality Act that allowed a single house of Congress to override immigration decisions made by the Attorney General. The Legislative Line-Item Veto Act of 2006 is consistent with this holding because the President s authority to defer funds would not explicitly be terminated by the disapproval of a proposed rescission by one of the houses of Congress. I agree with the Supreme Court s rulings in Clinton v. City of New York and I.N.S. v. Chadha. It is extremely important that Congress does not cede its law-making power to the President. I believe that this violates the Separation of Powers in addition to the Presentment Clause. In contrast, H.R would withstand constitutional scrutiny because it requires both houses of Congress to act on any rescission request and for this legislation to be sent back to the President for his signature. CONCLUSION In 2006, the federal government will once again rack up an annual budget deficit of over $300 billion, and our debt is expected to surpass $9 trillion. Meanwhile, the retirement of the baby boom generation looms on the horizon, threatening to severely exacerbate this problem. Given these dire circumstances, it is essential that we act now to give the President all of the necessary tools to help us get our fiscal house in order. By providing the President with the scalpel he needs to pinpoint and propose the elimination of wasteful spending, H.R takes an important first step toward achieving this goal.

7 8 Debate 21 A Line-Item Veto for the President: Unwise Grant of Power CRISTINA MARTIN FIRVIDA [I am here] to testify on behalf of the National Women s Law Center on H.R. 4890, the Legislative Line Item Veto Act of The bill would dramatically expand the powers of the President in relation to Congress, presenting serious policy and constitutional questions while doing little, if anything, to control growing deficits. The bill has sometimes been described as a means of eliminating unnecessary earmarks, but its scope is far broader. H.R would give the President unprecedented power to suspend, and effectively cancel, provisions of law enacted by Congress, even after Congress has rejected the President s rescission proposal. The expanded rescission power would apply not only to appropriations, currently subject to a more limited rescission authority, but also to direct spending for programs upon which millions of Americans rely, and, on its face, some targeted tax benefits. In addition, the bill would enable the President to control the legislative agenda of Congress, because the President would have the ability to control the timing and number of rescission bills sent to Congress, and the expedited rescission process would require that Congress respond. These sweeping new provisions raise significant policy issues and effectively confer upon the President the power to amend or repeal duly enacted legislation, in violation of the separation of powers doctrine and the presentment and bicameralism clauses of Article I, Section 7 of the Constitution of the United States. In addition, empirical evidence suggests that the proposed Legislative Line Item Veto Act would not result in substantial savings that would reduce our nation s record deficits. Indeed, the potential for Congress to agree to fund the President s priorities in exchange for the President s promise not to exercise the veto suggests that spending may increase as a result of this legislation. H.R GRANTS THE PRESIDENT SWEEPING POWERS TO SUSPEND AND EFFECTIVELY CANCEL COVERED SPENDING AND TAX PROVISIONS This bill would give the President the unilateral power to suspend, and in some cases, effectively cancel, spending and tax provisions enacted by Congress. This Presidential power to essentially amend or repeal duly enacted legislation is bad public policy and presents the clearest constitutional violation in H.R H.R would give the President sweeping new authority to suspend covered spending and tax provisions even after Congress had rejected the proposed rescission. The bill would allow the President to suspend funding for a period of 180 days (and possibly more) after sending a special message to Congress seeking legislative approval of the rescission, even if Congress explicitly rejects it. This is a dramatic departure from current rescission authority. Current law gives the President authority to withhold appropriated funds for up to 45 session days while Congress considers a proposed rescission, but explicitly requires that the President s suspension of funding immediately end if

8 Budgetary Policy 9 one legislative house rejects the President s rescission request (or at the end of the 45- day period if no action is taken) and that budget authority be made available for obligation immediately. The Line Item Veto Act of 1996 likewise required the President to immediately reinstate canceled funding if Congress adopted a joint resolution of disapproval. Giving the President the power to ignore the expressed will of Congress as H.R would do is unprecedented. In addition, H.R grants the President extremely broad discretion to determine when, in what fashion, and how often to rescind covered provisions of law. While H.R requires Congress to act upon a rescission request sent by the President within 13 session days, the bill permits the President to send his proposed rescissions to Congress up to one year after enacting a spending or tax bill. In addition, the bill allows the President to send rescissions from one spending or tax law in numerous rescission bills to Congress, or to send rescissions from several spending or tax laws in one rescission bill. Finally, in contrast to current law, the bill does not appear to prohibit the President from resubmitting the rejected rescission in a different rescission request, and continuing to suspend the operation of the provision. The powers granted to the President under H.R. 4890, taken together, would effectively grant the President the ability not merely to delay, but to cancel provisions of law unilaterally. For example, the President could submit a package of rescissions to Congress in the spring and withhold funding until the end of the fiscal year, when spending authority would cease for many items, terminating the program even if Congress explicitly rejected the rescission. As a result of the broad new powers granted to the President in H.R. 4890, federal agencies, state and local governments, and individuals who administer or receive federal funding through a variety of programs and benefits, would be unable to rely on funding approved by Congress. H.R WOULD ALLOW THE PRESIDENT TO RESCIND DIRECT SPENDING AS WELL AS APPROPRIATIONS, BUT DO LITTLE TO CONTROL SPECIAL INTEREST TAX BREAKS The breadth of the cancellation power granted to the President under H.R is matched by the breadth of the spending items to which it can apply, compounding the constitutional and policy concerns raised by the new power. Despite the fact that H.R has been justified as a mechanism for controlling earmarks and tax benefits for powerful special interests, the bill also would apply to broad-based items of direct spending, and render low-income recipients of mandatory spending programs especially vulnerable to program cuts. The expanded rescission powers authorized by H.R would apply not only to appropriations, to which more limited rescission authority currently applies, but also to new items of mandatory spending, allowing the President to override individual entitlements enacted into law. The expansion of the President s rescission authority to apply to direct spending items is especially troubling because the broad definition of direct spending in the bill may be claimed to allow the cancellation of existing entitlement spending in reauthorizations, rather than only new spending. For example, if H.R were to be enacted, it is possible that a significant number of provisions in the reauthorizations next year of the State Children s Health Insurance Program and the Farm Bill (which authorizes Food Stamps) could be

9 10 Debate 21 subject to rescission even if those provisions were not new and did not add to the costs of the legislation. Conversely, the definition of targeted tax benefit in the bill is so narrowly constructed as to virtually guarantee that no carefully drafted tax benefit will be subject to the new cancellation power. The definition used in the bill would apply to tax provisions that benefit 100 or fewer beneficiaries, except that it would not apply if the provision treats all persons engaged in the same industry or activity or owning the same type of property similarly. The Joint Committee on Taxation [of Congress] analyzed this definition (which was included as part of the Line Item Veto Act of 1996), and concluded that the exceptions were vague and poorly defined. As a result, this creates the potential to altogether exempt tax breaks from the line item veto. For example, had the Legislative Line Item Veto Act of 2006 been in effect when the 2004 corporate tax bill was passed, the President might have been powerless to cancel special interest tax breaks for ceiling fan importers and tacklebox manufacturers, among others, which were criticized by many observers as pork, and which presumably would be the type of targeted tax benefit H.R is supposed to eliminate. While some justify limiting the definition of targeted tax benefits to ensure that only special interest tax breaks and not broad-based tax policies are subject to cancellation, no similar limitation exists to ensure that broad-based direct spending policies are also not subject to cancellation. In fact, the only broad-based tax policies that may be subject to the Legislative Line Item Veto are those that include items of direct spending. The two most prominent tax credits that trigger direct spending are the Earned Income Credit and the Additional Child Tax Credit. Both of these credits assist low-income families. Should H.R be adopted, the President may be authorized to cancel portions of these credits should Congress, for example, vote to extend improvements to the credits passed in 2001 and There is no justification for giving the President the authority to suspend tax provisions that help millions of poor children but not tax provisions that benefit a few thousand multi-millionaires. H.R ALLOWS THE PRESIDENT TO CONTROL THE CONGRESSIONAL AGENDA The process for Congress to respond to the President s proposed rescissions set forth by H.R creates the potential for the President to exercise considerable control over the congressional schedule and agenda, above and beyond budget and spending bills. This ability to reorder congressional legislative priorities in and of itself will result in a bad policy outcome, and when combined with the broad authority to cancel spending granted by H.R. 4890, exacerbates the constitutional breach contained in this proposal. Under current law, if Congress fails to approve the President s rescission proposal within 45 session days, including by inaction, spending authority must be restored. Given that Congress has the power of the purse under our constitutional structure of separation of powers, it is appropriate to leave to Congress the discretion to act on the President s suggested rescissions, to act instead on its own package of rescissions, or to do nothing at all. However, H.R would strip Congress of this discretion and would amend House and Senate rules to provide for fast-track consideration of presidential rescission messages. Under the new fast-track rules in H.R. 4890, a bill encompassing the President s rescission package must be introduced by

10 Budgetary Policy 11 congressional leadership no later than two session days after the President sends a special message to Congress proposing the rescissions. If no bill is introduced by the second session day, any member may introduce the bill thereafter. Once the rescission bill is introduced, the appropriate committees are required to approve the bill without any change no later than the fifth session day, or, if the appropriate committees fail to do so by that day, the bill is automatically discharged from the committees. Both the House and Senate must have an up or down vote on the rescission bill, without amendment, by the end of the tenth session day after introduction of the bill. In summary, if the procedures are adhered to and are not waived by rule or otherwise ignored, Congress would be compelled to complete action on the President s rescissions within 13 session days of the President s sending the proposal to Congress. In combination with the broad discretionary authority granted to the President to send rescission messages at any time and in any manner that the President sees fit, these fast-track procedures are an invitation to allow the President to control the entire Congressional legislative agenda. For example, a President could exercise the rescission authority as a parliamentary tool to tie up the Congressional schedule indefinitely or until the President receives the concessions he or she seeks. The President could send over a series of bills that rescind spending items from bills that were passed and signed at different times, bundling the rescission of spending items that are popular in Congress with those that are unpopular with the public, in order to compel Congress to turn away from other work and dispose of the rescissions. This would enable the President to control the timing of votes in Congress on other pending legislation. If deployed during the second half of a second session of any given Congress, the tactic could run out the clock on other pending legislation. It is important to note that H.R could affect consideration of all pending legislation in this way, not just legislation related to spending items. THE EXPANSIVE POWERS GRANTED TO THE PRESIDENT BY H.R RAISE SERIOUS CONSTITUTIONAL PROBLEMS The extraordinary new powers that H.R would confer upon the President raise serious constitutional problems under the separation of powers doctrine, as well as the presentment and bicameralism requirements of Article 1, section 7 of the Constitution of the United States. The separation of powers is a fundamental feature of our Constitution and our system of government. It was designed to and does play a crucial role in safeguarding the liberties and freedoms that the Constitution created and which the founding fathers endeavored to protect. As Justice [Anthony M.] Kennedy so succinctly put it in his concurrence in Clinton v. City of New York [1998]: Liberty is always at stake when one or more of the branches seek to transgress the separation of powers. Separation of powers was designed to implement a fundamental insight: Concentration of power in the hands of a single branch is a threat to liberty. The Federalist states the axiom in these explicit terms: The accumulation of all powers, legislative, executive, and judiciary, in the same hands may justly be pronounced the very definition of tyranny. The Supreme Court has historically taken a strict approach to analyzing potential violations of the separation of powers

11 12 Debate 21 doctrine. A long line of cases demonstrates that the Court is extremely skeptical of any encroachment on the power of each branch and consequently will apply a strict formal analysis frequently resulting in the invalidation of the Congressional act. As the court stated in Mistretta v. United States [1989]: Accordingly, we have not hesitated to strike down provisions of law that either accrete to a single Branch powers more appropriately diffused among separate Branches or that undermine the authority and independence of one or another coordinate Branch. For example, just as the Framers recognized the particular danger of the Legislative Branch s accreting to itself judicial or executive power, so too have we invalidated attempts by Congress to exercise the responsibilities of other Branches or to reassign powers vested by the Constitution in either the Judicial Branch or Executive Branch. In Clinton v. City of New York, the Court emphasized that while some lawmaking responsibilities are assigned to the President in Articles I and II of the Constitution, there is no provision in the Constitution that authorizes the President to enact, to amend, or to repeal statutes. In addition, the lack of a constitutional provision assigning the President such a role was interpreted to be the equivalent of an express prohibition. The Court ruled in Clinton that allowing the President to cancel spending unilaterally amounted to an impermissible exercise of the power to amend or repeal statutes, a power that is explicitly reserved for the Congress under the Constitution. Like the power to cancel items of spending struck down by the Court in Clinton, the powers granted to the President by H.R constitute an amendment or repeal of a statute by the President. Under H.R. 4890, the President can suspend the operation of provisions of law for 180 days even if Congress rejects the proposed rescission. H.R gives the President the power to decide when to submit a rescission request, and, depending when the rescission is submitted, the suspension could result in the permanent elimination of spending authority. H.R also would allow the President to resubmit proposed rescissions that Congress had previously rejected, which likewise could effectively terminate spending authority. Because the broad powers granted to the President by H.R could end, as a practical matter, programs funded by discretionary spending, direct spending programs, or tax benefits previously approved by Congress, [i]n both legal and practical effect, the President [would have] amended Acts of Congress by repealing a portion of each. As the Congressional Research Service concluded, these provisions may reach far enough to be considered an effective grant of authority to cancel provisions of law, and that was proscribed by the Supreme Court in Clinton v. City of New York. In addition, because the cancellation authority the President is granted by H.R is legislative in nature, it also violates the provisions of Article I, Section 7 of the Constitution of the United States, namely, the presentment and bicameralism clauses. These clauses provide that no law can take effect without the approval of both Houses of Congress and that all legislation must be presented to the President before becoming law. As INS v. Chadha [1983] makes clear, the amendment and repeal of statutes, no less than their enactment, must conform with Article I. Pursuant to H.R. 4890, the President would have the ability to create a different law from one duly

12 Budgetary Policy 13 enacted by Congress and signed by the President, temporarily and possibly permanently, without Congressional approval and despite Congressional disapproval. The fact that Congress is considering granting the President such extraordinary power does not resolve the constitutional issues. The Constitution does not authorize Congress to cede to the executive that power which is properly its own. As Justice Kennedy stated in his concurrence in Clinton: That a congressional cession of power is voluntary does not make it innocuous. The Constitution is a compact enduring for more than our time, and one Congress cannot yield up its own powers, much less those of other Congresses to follow. Abdication of responsibility is not part of the constitutional design. H.R IS UNLIKELY TO REDUCE AND COULD EVEN INCREASE SPENDING The experience with line item vetoes at the federal and state level does not suggest that enacting H.R will significantly reduce the deficit. Moreover, by significantly increasing the President s ability to negotiate for the Administration s own budget priorities, the line item veto may actually increase spending. While no amount of savings or deficit reduction could justify a violation of the Constitution, the very poor track record of the line item veto as a tool to control spending should alone be grounds to reject the proposal. The President s current rescission authority has not produced significant savings over time. In fact, the current administration (in contrast to other administrations) has never used current rescission authority (nor the constitutional veto power) to curtail spending. Nonetheless, frustration with current rescission authority has suggested to some that a line item veto is needed to give the President the power to control spending. However, the evidence on the effect of a more aggressive and unconstitutional rescission authority, the Line Item Veto Act of 1996, shows minimal impact on budget savings. According to the Congressional Research Service, the implementation of the 1996 Act produced modest savings. In one year, the President successfully vetoed $355 million in spending out of a $1.7 trillion budget. The total savings produced by President Clinton s line item vetoes amounted to less than $600 million over five years. The savings would have been greater had Congress approved all of the President s request to cancel funding but even if each and every cancellation had been accepted, the amount would still have come to well under $1 billion over five years. The picture from the states also provides little evidence that the line item veto is an effective means of controlling spending. Currently, 43 states have line item veto authority for their governors. State budget practices are fundamentally different from federal budgeting practices, in part because the constitutions of most states provide very explicit details on how budgets are to be enacted, and most give the executive branch of government a much stronger role in budgeting than is constitutionally permissible at the federal level. However, even governors with significant line item veto power are unable to secure significant savings through it. Douglas Holtz-Eakin, former director of the Congressional Budget Office [CBO], in a survey of evidence from the states concluded that long run budgetary behavior is not significantly affected by the power of an item veto. In testimony last month before the House Rules Committee, the CBO renewed the obser-

13 14 Debate 21 vation that in some states the line item veto has not decreased spending, as the result of governors and legislatures negotiating to include a governor s spending priorities in a state s budget in exchange for a promise that the governor will not exercise line item veto authority. The CBO expressed concern that a similar dynamic at the federal level would result in higher spending. Indeed, the concerns expressed by the CBO have been echoed and expanded upon by other observers. George Will, in an insightful column examining the line item veto, stated that, knowing the president can veto line items, legislators might feel even freer to pack them into legislation, thereby earning constituents gratitude for at least trying to deliver. He went on to describe how the President could buy the support of members of Congress on his legislative priorities in exchange for a promise that he would not veto the spending priorities of the members. The Congressional Research Service came to a similar conclusion in a 2005 report. Warning that savings would be very limited under a line item veto, the Congressional Research Service went on to state, Under some circumstances, the availability of an item of veto could increase spending. The Administration might agree to withhold the use of an item veto for a particular program if Members of Congress agreed to support a spending program initiated by the President. The concern that the Legislative Line Item Veto will not only fail to decrease spending but may exacerbate the record deficits that we face is one that must be taken seriously. CONCLUSION The separation of powers is fundamental to our Constitution and system of government. Our Constitution does not authorize the President to enact, amend, or repeal statutes. Granting the President that authority as H.R would effectively do would be unwise as well as unconstitutional.

14 THE CONTINUING DEBATE: A Line-Item Veto for the President Budgetary Policy 15 What Is New The bill discussed in this debate, H.R passed the House of Representatives with most Republicans voting yes and most Democrats voting no, but then died in the Senate without ever coming to a vote. Meanwhile, Congress took no action during 2006 to limit pork-barrel projects to make it easier to identify them. Instead it spent $29 billion for almost 10,000 pork-barrel projects, also called earmarks. When the Democrats captured Congress in the elections, they pledged to reduce earmarks and to bring transparency to their use. Some openness and restrictions were adopted, and, in fact, spending on earmarks dropped by about 30% to some $20 million in Just one such project related to combating an onslaught of mormon beetles ravaging Nevada s agriculture. The beetles are so named after their ancestors nearly destroyed the crops of Utah s Mormon settlers in 1848 before being brought under control by voracious seagulls. Where are the seagulls when you need them?, Nevada s Senator Harry Reid, who coincidentally is a Mormon, rhetorically asked. Reid could not produce seagulls, but he did add $1.1 million to a bill to fund other defenses against the invading insects. During 2008, pork continued to flow out of Congress and to be a political issue. During the first debate of the 2008 presidential campaign, John McCain accused Barack Obama of being a prime porker by sponsoring $18 billion in earmarks as a senator. At the vice president level, Sarah Palin trumpeted her rejection while governor of Alaska of an earmark to build a bridge to nowhere, and the Democrats accused her of actually trying to get it and only reversing herself when it became clear the project would not be funded by Congress. Where to Find More A group favoring a line-item veto is the Citizens Against Government Waste at Among other things, you will find a hyperlink to the annual Pig Book detailing what the group considers pork-barrel legislation. How the Line-Item Veto Act of 1996 was used before it was ruled unconstitutional is at the National Archives and Records Administration, History of Line Item Veto Notices, at The site also links to a copy of the legislation. Additional information can be found in a Congressional Research Service issue brief for Congress, Item Veto and Expanded Impoundment Proposals, September 15, 2000 at: The National Conference of State Legislatures reviews the use of line-item veto authority in the states in, Gubernatorial Veto Authority with Respect to Major Budget Bill(s) at What More to Do Pork exists in the eye of the beholder. What to some may seem like outrageously wasteful spending may seem to others to be a prudent allocation of budget dollars. One way to evaluate this is to go the Web site of Citizens Against Government Waste and to the last annual Pig Book, which lists the spending that group considers porkbarrel appropriations. Think about the items. Do you agree all are wasteful? You can

15 16 Debate 21 even divide the class up. One person or a team could be the pork prosecutors advocating rejection of all these spending items. Others in the class could be senators from the states receiving the alleged pork. They would defend the appropriations for their state. The rest of the class could be the collective president, assuming you have a lineitem veto and lining out or leaving in each item presented by the pork prosecutors and defended by the indignant senators.